All posts by mickeybarb@charter.net

OCP Africa, Nigerian Institute Partner; Special Wheat Fertilizer Planned

Morocco, News, News Briefs, Nigeria

OCP Africa has partnered with the Nigerian Institute of Soil Science (NISS) to improve soil nutrients, with the aim of boosting Nigerian farmers’ productivity. The two parties on March 24 inked a Memorandum of Understanding (MOU) following a one-day inception workshop held in Jahi, in the Nigerian state of Abuja, according to a statement on NISS’ website.

The project is aimed at improving farmers’ yield per hectare through a better understanding of soil management. Nigerian farmers’ low yield per hectare is attributed to poor soil conditions, according to a report this week by Nigeria’s Business Day, citing OCP Africa Nigeria Country Manager and OCP Africa Deputy Managing Director, Caleb Usoh.

Under the partnership agreement, OCP Africa, a wholly owned subsidiary of Morocco’s OCP SA, will provide the financial support, while NISS will provide technical support.

The project aligns with several other OCP Africa farmer-centric projects aimed at bringing precision to the practice of agriculture in Nigeria and Africa as a whole, said Usoh.

In a separate development, OCP Africa has partnered with research institutions in Nigeria to grow the West African country’s wheat production by developing a specialized fertilizer for wheat, according to Business Day.

OCP Africa is reported to have partnered with Nigerian research institutions such as the Lake Chad Research Institute (LCRI), the Institute of Agricultural Research and Training (IART) and BUK to increase wheat production.

According to the report, citing a presentation on “The Status of Wheat Research and Production in Nigeria” by former Executive Director at LCRI, Oluwasina Olabanji, Nigeria needs 5.1 million mt of wheat grain annually, but presently produces just 300,000 mt (basis 2017 data) and consequently depends on imports to meet the massive shortfall.

Saudi’s CMA Approves National Fertilizer Co. Listing Application

News, News Briefs, Saudi Arabia

Saudi Arabia’s Capital Market Authority (CMA) on March 31 approved the application from Riyadh-based National Fertilizer Co. to register shares for direct listing on the Kingdom’s parallel equity market, “Nomu,” according to a report by the Saudi financial news portal, Argaam, citing a CMA statement.

The approval on the application will be valid for six months from the CMA Board resolution date, and the approval will be cancelled if the listing of the companies’ shares is not completed within this period.

Nomu, launched in February 2017, has “lighter” listing requirements than the Saudi Stock Exchange Tadawul.

Anglo American to Conduct Aerial Survey of Woodsmith Mine

England, News, News Briefs, Polyhalite, Specialty

Anglo American Plc, the owner of the Woodsmith polyhalite mining project under development in northeast England, is undertaking an aerial geophysical survey over the area, aimed at strengthening the company’s understanding of the area’s geology.

The aerial survey will begin on April 5 and take around two weeks, according to a company statement last week.

“We’ve already undertaken significant exploratory drilling and seismic surveying in the area since 2012,” said Anglo American External Affairs Director Gareth Edmunds. “This aerial survey will build on that and help us to create a 3D map of the geology beneath the surface.”

Anglo American said it is using one of the only two contractors in the world that can do this type of survey.

Kima Awards Tecnimont Operation & Maintenance Contract for NH3 Plant

Ammonia, Egypt, Europe, News, News Briefs

Egyptian Chemical Industries (Kima) has awarded a contract for operation and maintenance of its new Ammonia-2 plant in Egypt’s Aswan industrial area to Italy’s Tecnimont SpA, according to a report by the country’s Mubasher information. The value of the contract was not disclosed. However, according to a March 29 stock exchange filing by Kima, cited by the report, the contract consideration amount will be paid after deducting dues owed by the Italian company to Kima.

Kima’s Board of Directors in October 2020 approved a dispute settlement with Tecnimont regarding the KIMA 2 project Lump Sum Turn Key contract. Tecnimont was the ammonia plant’s EPC contractor, as well as that of the urea plant at the site.

According to Egyptian media reports citing a Kima statement at the time, under the settlement reached, Tecnimont has the right to be compensated due to the losses it suffered resulting from the devaluation, while Kima will waive off any amounts, which have been claimed or not, resulting from the contract signed by both companies.

The 1,200 mt/d capacity ammonia plant began production in July 2019, using KBR’s Purifier technology (GM July 12, 2019)

The plant, along with the urea plant at the site, successfully passed the contractors’ performance tests in June last year and was handed over to Kima (GM June 26, 2020).

Poland’s Grupa Azoty Preliminary FY2020 Results: Net Profit Down 13 Percent

Earnings, News, Poland

Polish chemicals and fertilizer group Grupa Azoty SA, Tarnów, has reported a preliminary 13 percent decline in full-year 2020 net profit to Pln355.4 million (approximately $89.6 million at current exchange rates) on revenues of Pln10.5 billion, according to a company filing. Full-year EBITDA was down 7 percent on the year, at Pln1.32 billion. Revenues were also down 7 percent.

Uralkali Ownership Consolidated

News, News Briefs, Potash, Russia

Uralkali and Uralchem, Moscow, have consolidated their ownership of Uralkali. Rinsoco Trading, which has been a shareholder in the Russian potash company for some six years, sold its remaining 5.8 percent stake to the potash company’s subsidiary Uralkali Invest LLC, according to an April 1 Interfax report, citing a company statement.

With its latest share purchase, Uralkali Invest has increased its holding in the potash company to 18.5 percent, and holds 19 percent of the ordinary shares.

Uralkali Invest bought 12.7 percent of Uralkali’s shares from Rinsoco Trading in February (GM Feb. 19, p. 37). It paid $885.3 million for the stake, according to the report, citing Uralkali’s FY2020 IFRS financial statements.

Uralkali’s principal shareholder since late last year is Dmitry Mazepin’s Uralchem, with 81.47 percent of the equity. Uralchem upped its stake in the potash company from 46.4 percent with the purchase of a 35.1 percent stake from Rinsoco in early December, in a deal that was financed by Russia’s Sberbank (GM Dec. 4, 2020).

Mazepin is Uralkali’s Deputy Chairman and a close business associate of Rinsoco Trading’s owner Belarusian businessman Dmitry Lobyak.

USDA Cuts Corn, Soybean Acreage Estimates

Featured, News, U.S.

The U.S. Department of Agriculture’s March 31 Prospective Plantings report estimates corn planted area at 91.1 million acres this year, down 0.9 million from the agency’s February outlook (GM Feb. 19, p. 1) and below analyst expectations, but up 325,000 acres from last year.

The low acreage was a surprise, as Bloomberg analyst surveys conducted ahead of the report showed expectations of corn planted area ranging from 92-94.5 million acres, with the average at 93.1 million acres.

Planting intentions for corn are up or unchanged in 24 of the 48 estimating states, USDA said. The largest increases are expected in the Dakotas, where producers intend to plant a combined 8.90 million acres, an increase of 2.00 million acres from 2020. Producers across most of the Cornbelt intend to plant fewer acres than last year. If realized, the planted area of corn in Idaho and Oregon will be the largest on record.

Soybean planted area is projected at 87.6 million acres, down a full 2.4 million acres from the February outlook, but up five percent from last year. As with corn, the soybean projection fell below analyst projections, which ranged from 88.9-91.3 million acres, according to the Bloomberg survey. If realized, USDA said this year’s planted soybean acreage will be the third highest on record.

All wheat planted area for 2021 is estimated at 46.4 million acres, up five percent from 2020, but the fourth lowest all wheat planted area since records began in 1919. USDA’s wheat acreage forecast outpaced Bloomberg’s analyst survey, which yielded an estimated range of 43.0-46.6 million acres.

The 2021 winter wheat planted area, at 33.1 million acres, is up 9 percent from last year and up 3 percent from the previous estimate, but represents the seventh- lowest planted acreage on record, USDA said. Area planted to other spring wheat for 2021 is estimated at 11.7 million acres, down 4 percent from 2020, while durum wheat is expected to total 1.54 million acres in 2021, down 9 percent from last year.

All cotton planted area for 2021 is estimated at 12.0 million acres, down less than 1 percent from last year. Upland area is estimated at 11.9 million acres, up slightly from 2020, while American Pima area is estimated at only 142,000 acres, down 30 percent from 2020. All rice planted acreage was projected at 2.71 million acres, down 11 percent from last year.

USDA also released its quarterly Grain Stocks report on March 31, which showed corn stocks as of March 1 totaling 7.70 billion bushels, down 3 percent from the same time last year. Soybean stocks were reported at 1.56 billion bushels, down 31 percent from March 1, 2020, while all wheat stocks totaled 1.31 billion bushels as of March 1, down 7 percent from a year ago.

EPA to Purge Outside Experts from Advisory Panels

News, News Briefs, U.S.

Environmental Protection Agency Administrator Michael Regan said this week that he will purge more than 40 outside experts from two scientific advisory committees that guide the work of the EPA, Bloomberg reported. The move is seen as an effort to shrink the influence of industry on the panels, known as the Science Advisory Board and the Clean Air Scientific Advisory Committee.

“Resetting these two scientific advisory committees will ensure the agency receives the best possible scientific insight to support our work to protect human health and the environment,” Regan said in a statement. “Today we return to a time-tested, fair and transparent process for soliciting membership to these critically important advisory bodies.”

Critics said Trump had packed the committees with appointees who were too often tied to the industries that EPA regulates, Bloomberg reported, creating conflicts of interest over EPA policies ranging from air pollution regulations to fracking. The Trump administration also attempted to bar experts from serving on the panels if they received grant money, a prohibition that critics said limited the participation of academic scientists. That restriction was dropped after a federal court ruling last year, however.

The EPA is calling for new applications for the two panels. An EPA spokesman said advisers dropped from the committees are eligible and encouraged to reapply if they choose.

Ammonia

Ammonia, Black Sea, Eastern Cornbelt, India, Market Watch, Middle East, Northwestern Europe, South Central, South Korea, Southeast, Southern Plains, Tampa, U.S. Gulf, Western Cornbelt

U.S. Gulf/Tampa:

Tampa ammonia prices for April continued at $545/mt CFR, with NOLA barges last done at $545/st FOB.

Eastern Cornbelt:

With preplant movement starting to pick up steam, sources reported slightly stronger ammonia prices in the Eastern Cornbelt.

Earlier offers at $570-$590/st FOB were reportedly off the table as Illinois and Indiana terminals edged up to $600-$630/st FOB, depending on location, with the high reported at East Dubuque, Ill. The top end of the regional range remained at $650/st FOB Henderson, Ky.

Western Cornbelt:

Ammonia prices reportedly firmed to $600/st FOB Palmyra Mo., at midweek, up from the previous $570/st FOB level. Other terminal values ranged from $600-$615/st FOB in the Western Cornbelt, with the low reported in Nebraska and the high at Marshalltown, Iowa. The market FOB Fort Dodge, Iowa, was quoted at the $605/st FOB level in late March.

Southern Plains:

Limited ammonia offers continued to be reported at $600/st FOB Pryor, Okla., $615/st FOB Enid, Okla., and Dodge City, Kan., and $630/st FOB Coffeyville, Kan. While the last offers out of Verdigris, Okla., were confirmed at the $575/st FOB level, sources said no current prices were being offered there or out of Woodward, Okla.

Truck tons out of Beaumont/Houston, Texas, were reported in the $550-$600/st FOB range in late March.

South Central:

Sources quoted new ammonia offers at $600/st FOB El Dorado, Ark., in late March. Other regional ammonia locations continued to withhold truck prices in the wake of scheduled turnarounds and production issues sparked by the February polar vortex, however, including Midway, Tenn., Donaldsonville, La., Cherokee, Ala., Hopewell, Va., and Waggaman, La.

Southeast:

Sources reported some limited ammonia offers at $575-$580/st FOB Augusta, Ga., and $610/st FOB Tampa for truck tons into Florida, Georgia, and the Carolinas.

Black Sea:

While no new ammonia business has been done, sources said producers are focusing on $450/mt FOB.

Rossosh reportedly has only 7,000 mt for sale, but is not talking about a price it would find acceptable. Sources said Trammo bid $450/mt FOB for the cargo, but got turned down. At the same time, Ostchem is looking to move a cargo of 10,000 mt in April at $450/mt FOB, but buyers appear to be pushing back against that price.

Lacking any new spot business from the area, the last public price of $430/mt FOB remains as the floor in price talks.

Middle East:

Buyers depending on SABIC material were disappointed this week as SABIC-4 unexpectedly went down. The shutdown in an already tight Arab Gulf market is expected to push up prices from the remaining producers in the area. Sources said the buyers who will be hit the hardest are those in India and Southeast Asia.

Iranian ammonia exports were reported by Trade Data Monitor for the first time since 2019. Exports for February were at 41,000 mt, with 18,000 mt going to India and 15,000 mt to China. The year-to-date exports were reported at 105,000 mt, again with India and China dominating the purchases.

India:

The announcement of a spot deal finally showed an Indian delivered ammonia price that fit more into the global market. A number of sources reported that IFFCO bought a cargo via Trammo and EBIC at $535-$550/mt CFR.

The SABIC-4 shutdown is expected to have a big impact on Indian buying, possibly forcing SABIC customers to look far afield for their product. The resulting search could lead to even higher prices.

Buyers are still waiting for the Indian government to settle on how much of a subsidy it will offer to DAP producers in the fiscal year that started April 1. The Indian DAP producers are also trying to figure out how expensive phos acid will be in the second quarter. Sources are already predicting it could see a jump of $100/mt, causing companies to look closely at increasing DAP imports instead of making more

Northwest Europe:

Sources said some ammonia deals in the area were done, but both sides are holding back on reporting the prices. Traders looked at the way prices have moved in the Caribbean, North Africa, and the Black Sea to figure out the current Antwerp price. Sources added that early material under $500/mt C&F is most likely all gone, leaving only the more expensive product available.

Talks are still underway with Baltic producers, but sources said little progress has been made in setting an April price. In the end, said one trader, the buyers and sellers may just invoke clauses in their contracts for the “last done” price until new prices are set.

South Korea:

February ammonia imports were up about 13 percent, to 123,000 mt from February 2020 imports of 109,000 mt, according to Trade Data Monitor. Year-to-date imports were up almost 20 percent, to 237,000 mt from 198,000 mt in the previous year.

Urea

Black Sea, Brazil, China, Eastern Cornbelt, India, Indonesia, Market Watch, Middle East, South Central, South Korea, Southeast, Southern Plains, U.S. Gulf, Urea, Western Cornbelt

U.S. Gulf:

Granular urea barges that were on the water and ready to move were reported to still be trading in the $400-$405/st FOB range. Stepping out into first-half and all-April, however, trades were called $361-$382/st FOB.

Sources said as time passes, so does the opportunity to get barges upriver in time for the season. In addition, there were fears that higher NOLA prices may have attracted more imports than were needed. The fact that India’s RCF cut its urea tender take from 1.2 million to 800,000 mt was also a factor depressing international price ideas.

Eastern Cornbelt:

The urea market was quoted at $420-$440/st FOB in the Eastern Cornbelt, with the low reported out of spot Illinois River terminals in late March. The Cincinnati, Ohio, market was pegged at $430-$440/st FOB, up $5/st at the high end of the range.

Western Cornbelt:

Urea remained in a broad range at $425-$455/st FOB in the Western Cornbelt, with the low reported at St. Louis, Mo., and the high at Sergeant Bluff, Iowa. Sources quoted the Caruthersville, Mo., urea market at the $430/st FOB level at midweek.

Southern Plains:

Sources pegged the urea market at $420-$440/st FOB in the Southern Plains, with the low confirmed at Houston early in the week. The Catoosa/Inola, Okla., market was quoted in the $430-$440/st FOB range at midweek, up $5-$10/st from the previous week, with some suggesting the market at Catoosa/Inola and Enid, Okla., had edged up to $440-$445/st FOB late in the week.

“Trucks are not too hard to find if you don’t wait until the last minute,” said one source. “Empty railcars are at a premium, and if you are relying on rail, you need to plan ahead.”

South Central:

Sources reported a slightly softer urea market in the South Central region in late March. Terminal prices ranged from $410-$430/st FOB, down $10/st from last report, with the low confirmed at Convent, La., and the upper end at Shreveport, La., Little Rock, Ark., and Pendleton, Ark. The Memphis, Tenn., market was pegged at $420-$425/st FOB.

Southeast:

The urea market in late March was quoted at a firm $430/st FOB Wilmington, N.C., and other port terminals in the Southeast.

India:

After counterbidding with traders for about 1.2 million mt soon after its tender closed on March 22, it now appears that RCF will take only 802,500 mt with an emphasis on West Coast purchases.

Letters of intent (LOI) to buy were issued on March 31 for the tonnage. The 537,500 mt to be delivered to West Coast ports means tons from China will not play as major a role as had previously been expected. LOIs were issued for only 265,000 mt for East Coast deliveries.

Under the initial offers in the tender, East Coast offers were 947,500 mt against East Coast offers of 889,500 mt.

RCF Awards as of March 31
Offering Company Quantity (mt) Discharge Port Source
Koch 50,000 Gangavaram China
50,000 Krishnapatnam
50,000 Pipavav
Transglobe 50,000 Karaikal China
50,000 Vizag
Amber 65,000 Kakinada China
Agrifert Liven 50,000 Mundra China
Ameropa 51,500 Kandla Arab Gulf-China
51,500 Mundra
51,500 Tuna
Gavilon 45,000 Rozy China
Swiss Singapore 46,000 Jaigarh Oman
Samsung 50,000 Kandla UAE
45,000 Dahej
Dreymoor 52,000 Pipavav FSU
Continental 45,000 Hazira China

Some sources said the reduction of tons from China was because of limited vessels available to move the tons by the April 28 shipping deadline. One trader had calculated 600,000 mt as the maximum tonnage that could be moved by vessels already on hand or bound for China.

Many in the industry said that level was the most optimistic view, however, given the potential for delays in loading due to weather and reported staff shortages at some ports due to COVID-19 limitations on personnel.

Industry watchers pointed to the high price paid in the tender. The $380/mt CFR for either coast represents about a $95/mt jump since the last tender and a rate not seen for many years. More than one trader wondered if the Department of Fertilizer had enough money in its coffers as the fiscal year came to an end in March.

Sources noted that while the payments will be made after the April 1 beginning of the new fiscal year, the commitment took place in the old year, which could have caused some concern with the government’s bean counters.

The tons slated for the West Coast are expected to come from Indonesia, Russia, and the Arab Gulf. Initially, industry watchers were concerned that the Black Sea material might have difficulty getting to India because of the blockage at the Suez Canal. However, the release of the Ever Given and Egypt’s declaration that it would quickly clear the vessel backlog eased concerns that the right vessels will be in place in the Black Sea to ship the urea.

Another tender will need to be called soon to ensure enough urea for the spring season. The next call is expected in late April or early May, but most likely after the April 28 shipping deadline for the current tender.

Sources said the Indians may have reduced the amount of tonnage in this tender to force down global urea prices by building up large reserves in the global market. Just before RCF announced it would take fewer tons, the Indonesian price for granular urea dropped to $345/mt FOB from $361/mt FOB.

At the same time, increased freight rates are forcing producers to scale back on prices, with traders now calling the Chinese prilled market in the $340s/mt FOB, down from the $350s/mt FOB based on the initial estimate when the tender closed. Even Egyptian producers are expecting the long string of rising prices to be broken when Abu Qir closes its tender on April 1.

China:

Prices have come off as freight rates continue to climb. Sources now report prilled urea deals done at $340-$345/mt FOB, with some talk of both prills and granular being offered in the $330s/mt FOB.

The new rates seem to be the result of continued tightness in the freight market. Sources said producers are adjusting their netbacks to conform to the landed price of product they promised to traders.

For the prilled producers, the lack of a larger sale to India is not seen as a major blow. Sources said there is still residual demand in China for some of the tonnage. Observers also noted that demand for granular and prills from other buyers, including those in Latin America, will help absorb some of the tons that otherwise would have gone to India.

Several traders are saying that the producers will seek some sort of retribution against India for reducing their take in this latest tender. Just how much vengeance they can get is uncertain, however.

By the time of the next tender, no other single buyer will have as big an influence on the market as India. While some demand is expected from a few regional buyers, sources said they will not have as much influence on the market as India. The general sense is that India will achieve lower prices in the next tender.

Indonesia:

The PIH tender that closed on March 29 showed a softening in the urea market. The producer had set a reserve price of $340/mt FOB for the 30,000-45,000 mt of granular urea it was offering. In the end, Agrifert Liven bought the full 45,000 mt at $345/mt FOB. Sources reported another cargo of 30,000 mt was also picked up at the same price by another trading house.

The final price is about $16/mt lower than the last public sale by an Indonesian producer. Sources said the fact that PIH set its reserve at $340/mt FOB was a firm indication that producers would have to adjust their prices downward.

Sources pointed to rising freight rates and a general unwillingness by buyers to keep paying ever-higher landed prices. Producers needed to drop their prices to compensate for the freight rates, said one trader. Even before the PIH tender closed, Chinese producers had indicated they would accept lower prices to ensure sales into India.

Middle East:

Arab Gulf producers are facing the same issue as other producers: higher freight rates pushing against their netbacks.

Sources said freight to India is now almost $15/mt, when just a month ago the price was under $10/mt. The difference is forcing producers to rethink their efforts to keep moving up the price of their product. Expectations of higher freight are keeping the Arab Gulf price in the mid-$350s/mt.

Product from the Arab Gulf remains tight. The shutdown of the SABIC-4 plant is expected to add more support to producers looking to prevent a collapse of prices in the area.

Abu Qir in Egypt closed a tender on April 1 for 25,000 mt of prilled and 10,000 mt of granular urea, with shipment in the second half of April. Sources said the tender will be the first real test of the new pricing environment in the Middle East. Expectations are that bids will be way under the current rate of $400/mt FOB, which producers have been able to secure for smaller lots in the past few weeks.

Iranian urea exports in February 2021 were reported at 110,000 mt, according to Trade Data Monitor. No numbers were available for February 2020, but February 2019 exports were at 271,000 mt. The main buyers in February were China and Mozambique with about 25,000 mt each, followed by Oman at 22,000 mt and Afghanistan at 20,000 mt. A handful of other countries bought less than 10,000 mt of the Iranian product.

So far this year, Iran has shipped 468,000 mt to the world. The single largest buyer was Turkey with 119,000 mt, followed by Brazil at 58,000 mt.

South Korea:

February urea imports moved up 28 percent, to 110,000 mt from 86,000 mt in February 2020. The main supplier was China at 41,000 mt, even though the amount was slightly down from the February 2020 total of 47,000 mt.

Year-to-date imports were reported at 186,000 mt by Trade Data Monitor, down 17 percent from 224,000 mt during the same period last year.

Black Sea:

Russian producer TOAZ announced thar it has increased its supply of urea to the domestic market by 20 percent compared with 2020. The move to step up supplies was seen as one reason why fewer Russian tons were being made available for export.

Brazil:

The urea market in Brazil turned quiet as Holy Week took over. With most offices slated to close by midweek, sources said there was little business concluded. The resulting doldrums softened the market to $393-$410/mt CFR at Paranagua.

Traders said they expected the price to shift upward if RCF made large purchases as part of its tender. News that fewer tons will be taken could have an impact on pricing ideas in Brazil, however.

The inland Rondonopolis market moved up as demand in the area stayed steady and traders expected a tighter and higher global market following the RCF/India tender results. The price was pegged at $475-$555/mt FOB ex-warehouse. Sorriso remained steady with a high of $530/mt FOB ex-warehouse.

The barter rate for 1 mt of urea is holding at 71 bags of corn.

Brazil Urea Prices
Terminal/City US$/mt FOB ex-warehouse
Week ending 03/26 Week Ending 4/02
Rondonopolis 465-540 475-555
Sorriso 480-530 480-530